Get exclusive money‑saving offers and guides

Life Insurance for Single People or Parents

What's the point of life insurance if you are single?

Life insurance can still be valuable to single people who want to ensure their family and friends do not have to endure financial hardship in the event that they pass away, suffer a serious medical condition or become permanently disabled. Life insurance can help you avoid leaving your immediate family with the burden of

I don't have anyone who depends on me - why would I need cover?

Unfortunate events can happen to you regardless of whether you have dependents or not. Consider the following events and the impact they would have on you and those around you.

You are seriously injured or ill and unable to work for six months. Would be able to keep on top of your bills and maintain your lifestyle?

You pass away suddenly. Have you considered how it would affect your parents or siblings? Not only would they have to deal with the grief your death, but also shoulder the financial burdens you left behind, such as debts, loans, and funeral expenses.

You suffer a serious medical condition such as stroke or cancer: How would you keep on top of your financial obligations as you are unable to work and undergo extensive medical treatment? You never be able to work to the same capacity again.

You become permanently disabled: You could suffer a great reduction in income as you are unable to work to your full capacity ever again. You have ongoing medical and nursing bills to cover and must make modifications to your home for your disablement.

Expenses you are responsible for (even without dependants)

Single people, just like those with families, also have financial obligations to meet.Whether with or without dependents , singles can still have immediate and ongoing expenses to cover that can run into the hundreds of thousands of dollars. These can include:

Rent or mortgage

Daily living costs; food, groceries, and clothes

Utilities; electricity, water, gas and telecommunication

Healthcare bills

Short-term loans; credit cards, student loans, personal and car loans

You might be underinsured without knowing it

Underinsurance remains an important issue in Australia. The emphasis has been brought predominantly on people with dependents, however the financial repercussions are still real of singles if they are underinsured or not insured at all.

Statistics have shown that three in four Australians will be diagnosed with a serious illness at least once in their working life (ABS, 2013). Without sufficient protection in place, many of these people will have to rely on savings or government welfare, which are often not enough for an extended period of time.

What types of life insurance are recommended for single people?

Total and Permanent Disability Insurance: provides coverage for when you are unable to work ever again as a result of permanent disability with a lump sum payment that you can use to replace lost income, pay for medical bills and modifications to your home or vehicle.

Trauma Insurance: provides a lump sum payment upon a diagnosis of serious medical event, such as cancer, brain tumours, loss of vision or limbs.

Income Protection: serves as a replacement for your income of up to 75% of your regular income, in the event of serious illness or injury and you are unable to work temporarily.

Life Cover: provides a lump sum benefit in the event of death or if you have been diagnosed with a terminal illness with only 12 months to live. This could help if you are single but have children.

Four financial responsibilities that single people will need to consider

While single people are generally grouped in peoples' minds under this umbrella of unencumbered freedom, single people can have dependants. As of June 2012, there were 961 thousand single parent families, making up 15% of all families. Roughly 67% of these single parent families had dependants living with them.

It may be a morbid train of thought, but making sure your final expenses are taken care of is something worth considering. The last thing you want to do is leave your surviving family members to deal with both emotional and financial grief at the time of your passing. If you don't have life cover with funeral insurance, one of your relatives may end up footing the bill. Even a basic funeral can be expensive with the average funeral costing anywhere from $4000 for a basic cremation to around $14,000 for a more elaborate ceremony.

Costs associated with funerals include:

Burial or cremation

Celebrant or clergy

Cemetery plot

Coffin

Death certificate

Flowers

Funeral director fees

Newspaper notices

Other expenses

Permits

The wake

Transport

Are you in control of your finances or are you buried in debt? Do you own property with a family member? If you were to pass-away, you'd be more than likely leaving your family member with a sizeable repayment because of your missing contribution. Would they be able to continue making payments or would they have to give up on the investment? If you planned ahead and look out a life insurance policy naming them as your beneficiary, you could leave them enough funds to cover your share of the mortgage, or perhaps to pay off the entire debt.

While you may already have health insurance, that doesn't provide you cover for any of the ancillary costs associated with getting sick. What would happen if you had to take an extended period off work? What if you sustained a life changing injury that meant you could never work again? While there are government benefits available, these only provide the bare minimum of cover. Having a life insurance policy in place can make sure you are able to continuing living YOUR life. Singles can choose to take out various levels of life insurance. Some life insurance policies cover as standard income protection, TPD and trauma insurance.

Income protection

Income protection is a simple and effective way to protect your finances when you are unable to work for a period of time due to sickness or injury. Income protection provides a monthly benefit of 75% of your salary for generally a maximum of two years.

TPD

TPD (Total Permanent Disability) insurance provides you with a lump sum should you no longer be able to work due to a life changing circumstance. You can choose from 'any occupation' or 'own occupation' policies and many policies also provide a death benefit.

Trauma insurance

Trauma insurance provides a lump sum benefit if you suffer a defined traumatic event. The policy is designed to help you deal with the immediate financial impacts that stem from suffering one of these traumatic events.

Common types of singles (and why life insurance is applicable)

The insurance needs of single people can shift at different stages in their life. Different types of life insurance plans can be tailored to suit the level of cover you require and your personal circumstances.

1. Young single adults

When you are young and your health is still in top shape, you can take advantage of lower premium rates in comparison to later stages of life when you are considered a greater risk to insurers due to the increased likelihood of pre-existing conditions.

Most insurers offer guaranteed insurability meaning you can lock in this rate and continue to enjoy the same level of cover as you get older without having to undergo additional medical tests. The cost of life insurance cover is partly calculated on the risk of a claim, so the older you are and the more health problems you have, the higher the cost of cover is likely to be.

2. Not-so-young single and working adults (with no dependents)

Since now you are working full-time, you are financially independent and may have accumulated more assets, as well as debts. It is important to have insurance in place, particularly to cover your ability to work and earn an income. While you are still young and healthy, you can take advantage of lower life insurance premiums and the flexibility to increase your cover at significant life events, such as buying a house, marriage and having a child.

3. Young single parents

As single mums and dads, you want to make sure that your children’s well being are taken care off. You work hard, making sure that there are food on the table and their education expenses are met. Remember that with only one parent whose income they rely on, being uninsured or underinsured puts your family at risk of a financial disaster in the future.

Life Cover with Child Cover option, TPD and/or Trauma Cover as a rider, and Income Protection.

4. Single parents with adult children

You have gone through the hard part of being a parent and you can’t help but feel proud, now that your adult children are leaving home. You can now be at ease, with a little less financial commitments to meet and you’ve also almost paid off all your debts. That said, it doesn’t mean that life insurance is now less of a priority.

If you have an existing life insurance, you may wish to reduce the amount of cover since you have less debts. If you are looking to apply for life insurance, the premiums you pay will be more expensive, as insurers take into account your age and health condition. If you had Child Cover in place for your children, these can usually be converted to an adult trauma policy once they turn 21.

5. Single retiree

Having retired from the workforce and your children raising their own family, it doesn’t make life insurance totally obsolete. If you were to pass away unexpected, consider the immediate expenses, such as medical bills, funeral costs, estate settlement and legal fees that your family will have to cover.

How much life insurance cover do I need if I am single?

The amount of cover you may need for your life insurance policies may vary depending on your personal circumstances. It is important to nominate a cover amount that is sufficient to cover your needs - no more, no less. You can use this calculator to estimate how much cover you'll need.

Should single individuals review life insurance regularly?

Life insurance is not the type of product that you set and forget. It is absolutely essential to review your life insurance policy on a yearly basis and assess whether they still meet your needs. As you go through life, your needs will change and your life insurance policy should reflect those needs, so you won't be caught off guard not having enough cover in place.

Most insurance providers offer the option to increase your cover when a significant life event occurs, such as marriage, buying your first home, having a baby, divorce, or death. Eligible events often vary between providers, so make sure that you read the Product Disclosure Statement (PDS) to find more information.

Finding affordable life insurance cover for singles: what to look for

When you compare life insurance for single people, there are some key factors to consider to ensure you are getting the best deal. This includes comparing areas such as:

The cost of the cover: Comparing the price of life insurance cover means that you can find a plan that fits in with your needs in terms of budget whilst also providing you with peace of mind.

The level of coverage: You should check what the level of coverage will be when comparing life insurance plans, as some providers will give you a higher level of coverage for your money than others.

Any additional features: Some life insurance plans comes with additional features and benefits whilst others are very basic. Make sure you check the plan to see exactly what you get for your money.

Exclusions and restrictions: As with all insurance plans, life insurance plans come with a number of restrictions and exclusions, so you will need to check these in order to ensure that you are familiar with regards to what is and is not covered.

What options do single people have for life Insurance and income protection?

Looking to get yourself covered? There are two types of life insurance available in the market that you may want to consider:

Direct life insurance: can be purchased directly over the phone or online, without using the service of an insurance adviser.

Retail life insurance: is a type of life insurance offered by a life insurance provider. To find policies with competitive premiums, it is recommended to consult with an insurance representative who can provide advice on a suitable product for you.

Life insurance is important to have even if you are single and protecting your financial future should be a priority, so should anything happen, you can worry less about money.

Richard is the Insurance Editor at finder, and has been wrangling insurance Product Disclosure Statements for the last 4 years. When he’s not helping Aussies make sense of the fine print, he can be found testing the quality of Aperol Spritzes in his new found home of New York. Richard studied Journalism at Macquarie University and The Missouri School of Journalism, and has a Tier 1 certification in General Advice for Life Insurance. He has also been published in CSO Australia and Dynamic Business.

Disclaimer - Hive Empire Pty Ltd (trading as finder.com.au, ABN: 18 118 785 121) provides factual information, general advice and services on financial products as a Corporate Authorised Representative (432664) of Advice Evolution Pty Ltd AFSL 342880. Please refer to our FSG - Financial Products. We also provide general advice on credit products under our own Credit Licence ACL 385509. Please refer to our Credit Guide for more information. We can also provide you with general advice and factual information on about a range of other products, services and providers. We are also a Corporate Authorised Representative of Countrywide Tolstrup Financial Services Group Pty Ltd. ABN 51 586 953 292 AFSL 244436 for the provision of general insurance products. Please refer to our FSG - General Insurance. We hope that the information and general advice we can provide will help you make a more informed decision. We are not owned by any Bank or Insurer and we are not a product issuer or a credit provider. Although we cover a wide range of products, providers and services we don't cover every product, provider or service available in the market so there may be other options available to you. We also don't recommend specific products, services or providers. If you decide to apply for a product or service through our website you will be dealing directly with the provider of that product or service and not with us. We endeavour to ensure that the information on this site is current and accurate but you should confirm any information with the product or service provider and read the information they can provide. If you are unsure you should get independent advice before you apply for any product or commit to any plan. (c) 2018.

Thank you for your feedback.

Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.

Important information about this website

finder.com.au is one of Australia's leading comparison websites. We compare from a wide set of major banks, insurers and product issuers.

finder.com.au has access to track details from the product issuers listed on our sites. Although we provide information on the products offered by a wide range of issuers, we don't cover every available product. You should consider whether the products featured on our site are appropriate for your needs and seek independent advice if you have any questions.

Products marked as 'Promoted' or "Advertisement" are prominently displayed either as a result of a commercial advertising arrangement or to highlight a particular product, provider or feature. Finder may receive remuneration from the Provider if you click on the related link, purchase or enquire about the product. Finder's decision to show a 'promoted' product is neither a recommendation that the product is appropriate for you nor an indication that the product is the best in its category. We encourage you to use the tools and information we provide to compare your options and find the best option for you.

The identification of a group of products, as 'Top' or 'Best' is a reflection of user preferences based on current website data. On a regular basis, analytics drive the creation of a list of popular products. Where these products are grouped, they appear in no particular order.

Where our site links to particular products or displays 'Go to site' buttons, we may receive a commission, referral fee or payment.

We try to take an open and transparent approach and provide a broad based comparison service. However, you should be aware that while we are an independently owned service, our comparison service does not include all providers or all products available in the market.

Some product issuers may provide products or offer services through multiple brands, associated companies or different labelling arrangements. This can make it difficult for consumers to compare alternatives or identify the companies behind the products. However, we aim to provide information to enable consumers to understand these issues.

Providing or obtaining an estimated insurance quote through us does not guarantee you can get the insurance. Acceptance by insurance companies is based on things like occupation, health and lifestyle. By providing you with the ability to apply for a credit card or loan we are not guaranteeing that your application will be approved. Your application for credit products is subject to the Provider's terms and conditions as well as their application and lending criteria.

Please read our website terms of use for more information about our services and our approach to privacy.